put me in the ‘hoping for a depression’ camp (yes, that’s depression, not recession)
the way I see it, there is at least $450 trillion dollars worth of derivative paper that has to be marked to its true value of zero – since people with a vested interest in the status quo are going to fight this massive loss of ‘wealth’ with every tool at their disposal, the re-pricing will take much longer than it should (see Japan for a case study)
all of this paper ‘wealth’ and the financial games that it enables will end because they aren’t based on any fundamental economic activity (like making a product or providing a service) – this derivative paper is like $450+ trillion dollars worth of free lunch floating around the planet only there is a problem: FREE LUNCH DOESN’T EXIST!!!
We could write all of this paper down to zero value overnight but that still wouldn’t get us back to a healthy economy because we wouldn’t have done anything to change people’s behavior or attitudes
It is going to take years to change the attitudes and values of the current American consumer – a shallow recession isn’t going to do the trick – Americans are so out of touch these days that most of them won’t even be aware we are in a recession unless some contestant on American Idol happens to mention it in passing
believe it or not, I am an optimist and believe that the future is bright for human beings – I am also a realist (engineer by birth and training) and this is how I see the world currently
call me an uber-bear if you want – reality only sucks if you choose to perceive it that way
Personally, I am cheering for gold because I believe that a meaningful rise in its price will signal the end of an era of selfishness, callous disregard for others and for our environment. It will represent the end of an era of political rule by people who are not fit to call themselves the leaders of society – not because they lack the ability, but because they are generally devoid of wisdom, empathy, respect and love for the people whose interests they are supposed to be representing.
To me, the glass is half full. I see change coming. It will be painful, but it will lead to better things as our values become appropriately prioritised. I see us moving out of the testosterone addled Neanderthal era, and towards a new era where we care more about the consequences of our selfish actions.
